She designates a committee of federal judges for the purpose of facilitating the renegotiation of public debt

Through a mandate of historic significance, Laura Taylor Swain designated five judges arising from different areas of the United States, in order to handle the case of Puerto Rico. (Archivo/GFR)

The Federal district Court judge Laura Taylor Swain commanded yesterday the creation of a mediation committee composed of five judges from the United States federal system, who will be in charge of facilitating the consensual resolution of the controversies about the Puerto Rican public debt.

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Through a mandate of historic significance, Swain designated five judges arising from different areas of the United States, in order to handle the case of Puerto Rico, which is, at the same time, the biggest one regarding a governmental restructuration process in American history.

Puerto Rico is attempting that its creditors condone part of the $74,000 billion owed to them, and $40,000 billion in obligations with the pensioners and active government employess.

According to Swain’s order, judge Barbara Houser, of the District Court of Northern Texas, will be leading the mediation committee of the cases under the Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).

Together with her would be working the judge of the Third Circuit Court of Appeals, Thomas Ambro; the senior judge of the District Court of Southern Texas, Nancy Atlas; the bankruptcy judge of the Court District of Eastern California, Christopher Klein; and the senior judge of the Court District of Southern New York, Víctor Marrero.

“”Hereby, the Court announces that it has designated a team of distinguished judges, who will be available in order to facilitate the confidential negotiation agreements of any and all the affairs and procedures that emerge in these cases”, states Swain’s order, in which it is highlighted that the members of the committee have “substantial” experience, both in the legal and professional fields, with the purpose of attending financial issues of high complexity, including emergency procedures.

Swain´s order was made after the events that occurred last May 17th, when the main legal adviser of the Fiscal Oversight Board, Martin Bienenstock, indicated that the key bondholders groups of the government were willing to participate in the alternate procedure that is the mediation.

According to the order, Judge Houser will have to explain the extent of the mediation committee in the hearing that will take place tnext June 28th in Puerto Rico. Afterwards, the mediation team –in the aftermath of meeting with the different parts- will identify the controversies and define how those gaps could be filled.

Swain indicated that those opposing to the designation of the members of the committee will have to present their objections directly to her chamber’s e-mail, no later than June 20th.

Mediation in local bankruptcy processes acquired relevance in 2012, when the city of Stockton -in California- used that mechanism and, a year later, when the city of Detroit -in Michigan- succeeded in renegotiating important concessions by creditors, under the guidance of mediation judge Gerald Rosen.